Municipal Fiber in the United States: An Empirical Assessment

27 Pages Posted: 3 Apr 2017 Last revised: 18 Aug 2017

See all articles by Christopher S. Yoo

Christopher S. Yoo

University of Pennsylvania Law School; University of Pennsylvania - Annenberg School for Communication; University of Pennsylvania - School of Engineering and Applied Science

Date Written: March 31, 2017

Abstract

The apparent success of municipal fiber projects in places such as Chattanooga has led to widespread calls for other cities to undertake similar initiatives. Unfortunately, empirical assessments of municipal fiber projects’ performance are few and far between, with most of the literature consisting of advocacy pieces that have been long on rhetoric and short on data. The anecdotal nature of these analyses has led the focus almost exclusively on supposed success stories instead of analyzing the universe of municipal fiber projects systematically.

To fill this gap, we present an empirical evaluation based on a unique dataset derived from the audited financial statements from 2010 to 2014, the public bond filings of every municipal fiber project in the U.S., and U.S. Census data. We conduct a discounted cash flow analysis on the data to assess whether particular projects will remain solvent or whether they will have to default on their bond obligations. We also present detailed case studies of particular projects identified as potential success stories by our analysis and by media reports. The net result is a fairly sobering picture of how likely municipal fiber projects will be able to generate sufficient returns to recover the investments needed to construct these networks and the implications such shortfalls can have.

Suggested Citation

Yoo, Christopher S., Municipal Fiber in the United States: An Empirical Assessment (March 31, 2017). Available at SSRN: https://ssrn.com/abstract=2944137 or http://dx.doi.org/10.2139/ssrn.2944137

Christopher S. Yoo (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom St.
Philadelphia, PA 19104-6204
United States
(215) 746-8772 (Phone)

HOME PAGE: http://www.law.upenn.edu/faculty/csyoo/

University of Pennsylvania - Annenberg School for Communication ( email )

3620 Walnut St.
Philadelphia, PA 19104-6220
United States
(215) 746-8772 (Phone)

University of Pennsylvania - School of Engineering and Applied Science ( email )

3330 Walnut St.
Philadelphia, PA 19104-6309
United States
(215) 746-8772 (Phone)

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